Impact of public sector changes

Following a consultation process last year regarding reforms to public sector exit payments, new regulations have come into force that will affect approximately 5 million public sector workers.

Around 350 responses from unions, public sector employers and public sector workers were received to the consultation last year, however the majority of responses expressed opposition to the government’s proposals.

Despite some opposition, the proposed reforms were taken forward to cut the cost of redundancies and to ensure greater consistency between schemes.

So, what to these new regulations mean for workers?

The Enterprise Act 2016 (Commencement No.2) Regulations 2017 came into force on 1 February 2017.

The Regulations restrict the extent of any exit payment payable to an employee in the public sector, bringing into force the provisions of Section 41 Enterprise Act 2016.

The aim of the Regulations is to ensure greater consistency between public sector redundancy compensation schemes and “value for money” for the taxpayer.

The reforms will affect the exit termination arrangements for approximately five million public sector workers including Civil Servants, Teachers, NHS Workers, Local Government Workers, Armed Forces Personnel, Police Officers and Fire Fighters.

The Regulations apply whether or not the worker is leaving as a result of Compul- sory Redundancy, Mutually Agreed Terms or even following an application for Voluntary Redundancy.

The Regulations provide for a cap on the total amount payable to the worker, including paying in lieu of notice, statutory or enhanced redundancy pay and/or any ex gratia payment to a maximum value of £95,000.

It should be noted that the Regulations impose a maximum sum and of course payments to public sector workers may be considerably less than the new cap.

The cap however provides a contrast to some much larger exit payments made to senior workers in the private sector.

It is important to note that employers considering restructuring a business or organisation and making redundancies should seek advice to ensure they are following correct procedures and regulations.

To speak to Martin Bloom about any aspect of Employment Law call 01733 295 632 or email martin.bloom@hegarty.co.uk